India is all set to embrace the new tax - Goods and Services Tax (GST) from 1st of July, 2017. The GST Council consisting of Finance Ministers of all the Indian States along with the Union Finance Minister, held its 17th meeting on 18-6-2017 to finalise certain Rules and proposals. The Council took several decisions including, relaxation in filing of Returns for the first two months, relaxation in GST rates for certain services, and enhancement of threshold limit for Composition scheme in respect of certain special category States, while introducing Negative list for the scheme.
Return filing date extended for first two months
For the first two months i.e., for the months of July and August, 2017, monthly return will be required to be filed based on a simple return (Form GSTR-3B) containing summary of outward and inward supplies. It has to be submitted by 20th of the subsequent month. Regular GSTR-1 containing invoice-wise details of outward supplies for July 2017 is to be filed by 5th of September and for August 2017 by 20th of September, 2017. As per the Press Release, no late fees and penalty will be imposed for the interim period.
GST rates for certain services
- Transportation of goods in a vessel – ITC on GST paid on ships, vessels would also be available for payment of 5% GST
- Accommodation in hotels, guest houses, etc., where room tariff is between Rs. 2500 per day to Rs. 7500 per day – 18% GST would be payable with full availability of ITC to the service provider
- Accommodation in hotels where room tariff above Rs. 7500 – 28% GST payable however full ITC would be available to the service provider
- Supply of Food/drinks in air-conditioned restaurant in 5-star or above rated Hotel – 18% GST payable with full availability of ITC
Composition levy – Threshold limit and Negative list
Threshold limit for composition levy for manufacturers, traders and restaurant service providers in certain special category States has been enhanced to Rs. 50 lakh. These special category States are Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, and Himachal Pradesh. It may be noted that threshold limit for State of Uttarakhand will however be Rs.75 lakh.
Further, the Composition scheme, which provides for reduced tax without availability of ITC, will not be available to manufacturers of ice cream and other edible ice, pan masala, and tobacco & manufactured tobacco substitutes.